 Thank you very much, Carl. Yeah, I was up here. I spent a lot of hours in this room and those right next to it. And I wanted to get back in the worst way, so I drove my own car and found a parking place and got here just on time. But it is certainly, my current role is managing director of the Energy Future Coalition. Energy Future Coalition is a nonpartisan, non-profit group that focuses on finding practical middle ground solutions to energy and climate problems that work. And co-founded by Boyden Gray, who was George H.W. Bush's White House counsel and John Podesta, who was Bill Clinton's chief of staff and headed by Tim Worth, former senator from Colorado. So there's a political pedigree there, but there's also a really strong desire to find good middle ground policies. Among the early convictions that they had in founding the Energy Future Coalition was that we actually did need to aim toward a clean energy future. We needed to find ways of having much less environmental impact in general climate, carbon impact in particular from our energy system going forward. And it was also clear from the very beginning that you really can't do that unless you take advantage of, unless you have access to the lavish renewable resources that we have in this country. We have wind energy, solar energy, geothermal energy that adds up to many times our national energy requirements if we can tap those resources economically and move them to where they use them, get the resources to the market. So we started a couple of years ago a group called Americans for Clean Energy Grid to focus in on that question. How do we develop the clean energy resources that we have and how do we move them to the market and how does it pencil? It has to work. It has to work economically. It has to work in competition with other clean energy sources that you could potentially build near the market. It has to work with cleaning up sources that aren't inherently clean. So we've been exploring these issues but it was pretty clear that you needed to do some serious quantitative analysis to truly understand the dynamics. What are the costs of developing renewable energy and moving it to market? What are the market impacts of having an energy source that is essentially all upfront costs with a very low to zero marginal operating costs and how does the market perceive these? So it was late last year I guess that we decided we needed to have some true experts focus in on those questions. And as a result of that we contracted with Synapse Energy Economics a very distinguished group of such experts to address those questions for us and today we are releasing the study that their analysis has produced. So without any further comments on my part I'm going to turn the microphone over to Ezra Hausmann who is Chief Operating Officer of Synapse and one of the co-authors of the study and he's sitting next to Bob Fagan who is the principal author of the study and between them they should be able to answer any questions about it. I think we're going to actually hold the questions until the other panelists have a chance to go. But with that Ezra let me hand it over to you. Thank you. Am I cued up here? No, okay. First technical snap forward. Well, I'll start. There's Amory here. I know that my presentation is right on the desktop there if somebody wants to double-click it, John. I'll just start by. I'll just speak loudly and without the relays. Synapse is a research and consulting firm in Cambridge, Massachusetts. For the research and consulting firm issues relating to energy and environment, clients include a number of state agencies who work for state legislative committees. We work for a lot of commissions, commission staff, state environmental groups. We work with a lot of state consumer advocates towards the federal DGA. We work with a number of environmental groups and foundations. And this has been a great opportunity for us to work with the Energy Future Coalition and Americans for a free energy grid because it involves a lot of areas that we work on that don't often get analyzed in the kind of comprehensive way that we're able to do in this report, which is looking at the cost of building transmission to support renewable energy development on the one hand and the market impacts of bringing this very low operating cost resource onto the grid on the other. So actually looking at those in one report is a great vision that the Energy Future Coalition had is going to work on this. We're going to get into the details. Still I'm waiting. Okay. Can everybody hear all right? So the first piece of background is just a kind of economics 101 for electricity markets, which is that electricity markets are based on a dispatch, let's say the units are turned on in order of the least costly to the most expensive. So that when a very low cost resource like wind which has no fuel cost and has virtually nothing to operate is available, that tends to displace the most expensive resources on the system. And that can bring down prices for the wholesale market and ultimately for consumers. This is an effect that we refer to as site or the supply-induced price effect. The Midwest region, which was the focus of this study, provides a great case study for this because there is such an abundance of wind potential, which will require some investments to bring it online. But once it's available, there's a great deal of geographic diversity. There's a lot of reason to believe that it will be very effective at producing this effect in reducing wholesale market costs. So the question that we're addressing in the study, as I mentioned at the outset, is how does the cost of building transmission compare to the price benefits of adding more wind to generation mix? Now, to be on the very specific side here, we did not actually produce paired examples of transmission build-outs and the wind that they would access. That's a extraordinarily complicated question. There have been a number of studies in the Midwest. There's the RGOS studies, the regional generation calculus. That has looked at that. It's been a topic of discussion at Eastern Interconnect Planning Council. We refer to those documents. We use wind build-outs that are consistent with those documents and transmission build-outs that look something like those. But we're not claiming to have tied one with the other all that carefully. This is the one-slide illustration of how our dispatch analysis model works. So each of the kind of bumpy curves that you see is the supply curve that I was describing. The different colors, of course, you can't quite make out on the lines, but if you sense what they are, the different colors represent the different kinds of resources. At the far left, we have the lowest cost resources on a running cost basis. And if you move over towards the right, as you build up the higher, higher aggregate load amounts, the costs of running those units increases. What is being shown here in the vertical dashed line is an example load block. So load for that particular time period might have been, I think, 65 gigawatts region wide. And so we're showing what the price would be at that load level under three scenarios. The middle line is what we are calling the base pace, which is just what we currently would anticipate for 2020 resources without any additional effort either to retire existing cold plants or to build wind. The top line is what happens if you just retire, in this case, 30 gigawatts, 12 gigawatts of coal. That's the important distinction. In this example, 12 gigawatts of coal, which tends to take away those lower cost resources and increase the price of energy. The lower line shows the combined effect of retiring those 12 gigawatts of coal and adding 40 gigawatts of wind to the system. So what we have in that case is a substantial decrease in the price below the base pace because, again, what's setting that price are lower cost resources, the higher cost resources that push off of the base pace. So that's, in the simplest terms, I can put it, the dispatch model that we're using for purposes of this analysis. The difference between those long and short is the demand, vertical demand, is the change in price because of the new resources. This price suppression effect is not something we invented. It's well-known and something that, in fact, is at the basis of the analysis of the Midwest ISO data, we've known multi-value projects and it's a commonly known dynamic that will show up in any kind of electricity dispatch model. We ran this analysis of a range of coal plant retirement models. These will be retirements in general in response to the new and upcoming regulations that are affecting coal economics. And the analysis show that it's a federal cost event. We also, as I mentioned, we looked at transmission costs. I'll show you those results in just a moment for a summary of them. And we found that over the full range of possible scenarios that the price suppression effect will have a greater impact in terms of savings in total electricity prices and the additional costs associated with transmission. And those numbers look ultimately something like $60 to $200 per year for a typical residential customer who's using 1,000 kilowatt hours per month. I mentioned that the transmission costs and transmission and wind scenarios are exactly matched. We consider this to be more indicative. Oh, okay. Stop yelling now. And there will be a good recording of my conclusions or something. So these are our caveats. The electric price, we're looking fairly far out on the margins here in some cases. So the electricity price effect, I would say, is quite robust if we're talking about small wind additions or even fairly large anticipated wind additions somewhat beyond that. Once we get into extremely large changes in the generation mix, then you have to start asking questions about how would the market respond if you do have a very large price suppression effect. Obviously that will affect the economics of existing generators and so it's hard to know what all the dynamics would be under those circumstances. So this is an important picture to provide context for our results. And what this shows is the breakdown of the costs that contribute to the electric bill of that typical 1,000 kilowatt hour a month customer in this case in the consumer's energy region. And the thing I'd like to just call your attention to is the green, I'm colorblind so you might have to help me out here if I think, the green transmission wedge there which shows the transmission which gets lots of attention from employees is really just about 5% of the typical electric bill. The generation piece which is the large red wedge is by far the lion's share of the cost of energy for a consumer. Distribution is an important fixed charge. That's the more local wires piece that makes it possible to bring power to your house. And that's, I think the reason transmission gets so much attention is federally regulated that there are cost allocation issues so you hear a lot about it but in fact even a significant change to that transmission component is not going to make it the most important piece of your electric bill whereas a modest change to the energy component of the bill will have quite a significant impact on what consumers have to pay every month. So when we did our transmission analysis we did pick three different transmission scenarios. I direct you to the report for details of where they came from but they were details of the scenarios but they came from the studies that are available from the Midwest ISO from the EIPC process. So the advantage of that is that they've been vetted by stakeholder groups. There is a basis for looking at getting a reality check on our estimated costs. We didn't go out and do engineering studies ourselves in order to cost out these transmission projects. Similarly the wind build-out scenarios are based on similar sources. In particular the RGOS study that I mentioned earlier looked at a wide range of wind potential sources for the Midwest so that was a good place to get some grounding in reality about what the potential is and I'll show you a map that goes with that in just a moment. And finally as I mentioned we did look at coal retirement scenarios there's been a lot of discussion of how much coal will retire under the new EPA regulations so we looked at a range in this case 312 and 23 gigawatts of retirements throughout the region. So this is a slide it's a little hard to see on this little screen this is a slide that just shows you what the transmission cost adders would be for the different transmission build-out scenarios in three different snapshot years. So we're looking at 2015, 2025, thank you, and 2031 and it's not so we're not throwing all this transmission on at once we have a realistic transmission build-out timeline we have a costing model in terms of how that would filter into rates and what we see is that the range of additions on a dollars per megawatt hour basis that's generally what we use for wholesale market prices is between a dollar and about 10 bucks a megawatt hour increase in costs. We talk mostly about cents per kilowatt hour on the retail level so that's about a tenth of a penny to about a tenth of a penny per kilowatt hour increase in the wholesale cost of power the power portion of your bill thank you, the transmission right, piece of your bill. So where should we compare that to? Well here's the full range of price suppression effect pictures whoops, thank you and what we've got here is one curve for each of our coal retirement scenarios so the thin dotted line on the bottom is 3 gigawatts of retirement, the middle one the dashed line is 12 gigawatts and the top line is 23 gigawatts and what you see on the vertical axis is what the average annual price suppression effect would be in dollars per megawatt hour so when we get to about 30 or 40 gigawatts of wind installed it's hard to see up there but that's on the order of about a $20 per megawatt hour, two cents a megawatt hour savings. When we get to much larger amounts of wind the savings can be one and a half, two times that so it can be up to, you know, in our model up to four cents a kilowatt hour. Now again at that point you're getting more of a reaction from the market so it's hard to know exactly what would happen or how long that effect would last but I just, you know this is the comparison, this is the range of transmission buildouts to quite an aggressive transmission buildout that in 2030 would be adding about a penny per kilowatt hour or 10 or $11 a megawatt hours to your bill whereas the price suppression effect even for buildouts which are quite foreseeable and probably will not have a major market impact is saving twice that so it's something like a two to one benefit for consumers based on these factors. So in conclusion there's opportunity for very large buildouts of wind in the Midwest on the basis of fairly modest transmission enhancements adding low running resources as I showed because of this supply curve effect will have quite a dramatic effect on the power part which is the most important part of consumers electricity bill and then just this last point and it is according to our analysis much larger than the cost of the transmission piece and the specific benefits will depend on what the contracting terms are what the market structures are engineering details we don't have perfect foresight into the 2020 or certainly not 2030 period. I should add that we were somewhat in terms of the contracting details an important point is we tried to be conservative on that so when we looked at savings for consumers in our study we assumed that half of the power only half of the power in your electric bill would be affected by this price suppression effect because about half the power would be under long term contracts including likely the wind power now is the number half I don't know if it's half today certainly don't know if it's half in 2030 it's very hard to get robust data on that but that's a pretty good first cut I believe for the Midwest ISO region and here's that last picture that I just wanted to mention this is really hard to see I apologize but essentially it shows the transmission very crude drawing of the transmission in the Midwest region including what's anticipated for the MVP projects and also the areas of the circles are areas of high wind potential I can tell you want to jump in and say something Bob always wants to say something when he sees a transmission map he loves them and he raised them to his kids at night I was just going to say that this is in public document my so publishes its MVP report called the MVP portfolio report if I'm not mistaken and this particular picture is in that report thanks so I did my conclusions so going the wrong way okay thank you it's so important to help us get a better view of transmission making things run making it reliable day in day out I certainly wouldn't want this person's job at all and probably nobody here would so he probably deserves an answer for having this job anyway we're going to hear now from Joe Gardner who is the executive director of real time operations for my so the Midwest independent system operator and my so is responsible for running through that and I think everybody stopped talking to the presentation as well good afternoon everybody there is one person in the room that wants my job so I've been doing it for a long time and I enjoy it I am in charge of the control center in Carmel as well as the one in St. Paul we have two control centers to run the Midwest ISO or my so and I've been doing it for a long time I can tell you that wind has changed our operation quite a bit over the last six years and I'll give you a little bit of a flavor for that today so I'm just going to review a little bit of history how we got to where we are over the last five or six years some of the impact that it's had how we've responded to that we are in charge of not only the reliability of the footprint but we are also trying to dispatch all the energy in the footprint in an efficient manner as possible including wind and we've made quite a few changes in our operation to try to get there both reliably and efficiently I'll also talk a little bit about what we see going forward what I'm going to tell you is what's on this slide basically which is that capacity and output continue to grow congestion will continue as more wind is added we could fairly regularly have to dispatch wind down in order to make sure that the transmission system is operated within limits and operated reliably that's principally because wind has been added either A without building more transmission or B plans to have transmission added are still in progress and they're not complete we dispatch it down a lot because it's not complete we are as they mentioned adding multi-value projects to help mitigate this one of the key things and key messages that the output variability of wind is something we do have to manage on a regular basis but as more and more wind gets added in more and more places it gets mitigated because of geographical dispersity and we've seen that in the data we get better at it and our tools are getting better we've added products to help deal with this generally speaking they're market products to make sure it's dealt with in an efficient manner we're getting better at forecasting it it's very important that we do that we are able to forecast it and we are getting better at it we don't anticipate significant operational management issues in the next several years an operator never says never but we don't anticipate it and we'll continue to get better as time goes on this is a picture a little bit of the growth of wind capacity in our footprint you can just see 6 years ago or just a little over 5 years ago we only had about 1,000 megawatts of wind capacity in our footprint today we have about 11,000 megawatts of wind capacity in our footprint and we'll have about 14,000 by the end of the year to put that in perspective that's about 10% of our capacity so it's a significant portion of the capacity in the footprint if the renewable portfolio standards in our footprint continue the way we project them we think we'll have about 27,000 megawatts of capacity in 2029 that's an estimate because it really depends on where they're put in windy places or non-windy places but it's an estimate we do have a lot of wind in our queue that people have come to us and said they'd like to put in but most of it won't get built we don't believe this is a picture of how it's grown in the last three years there's two important parts to this slide I'd like you to keep in mind number one the top part is growing quite a bit but the other important part is the summer piece which is the valleys of each year the summer piece is not going up as fast as to peak and that's because it's not as windy in the summer and when it's not as windy you don't get as much output so the amount of wind we get in our summer which happens to also be our peak season for load it's not going up as rapidly as it is in the winter and that is an important part this actually looks bad because the trend is going down and what we're looking at here is the capacity factor of wind meaning how much per megawatt capacity are you getting out of the plants in energy and it's going down there's a good reason why it's going down the wind is now being put in places where it's not as windy so the more you put generation in places where it's not as windy the less output you get as a function of the capacity but this also is a reason why we can help manage it from an operational basis because it is getting spread out the reason it's important that it gets spread out is that it's very simple the wind doesn't start blowing everywhere all at the same time and it doesn't stop blowing everywhere all at the same time if we had continued on the trend of putting all the wind out of the original wind went we would have a lot more difficulty managing it it's the fact that it's getting spread out that makes it manageable earlier I talked about the fact that the wind capacity is coming online it's coming online without necessarily having transmission investment and that's caused us to when lines start loading up and we realized we're going to have a reliability issue we were having to get on the phone, call the wind plant dispatch them down that's not in the very efficient way to manage it and so we set off a couple of years ago to put a dispatchable product in place most of the new wind farms if not all the new wind farms are able to be dispatched and basically the way they do that is they just turn their blades on the farms themselves and they're able to very rapidly lower their output so when we do have transmission reliability issues we can send a dispatch signal to them and we can do that at their price so they give us an offer how much is it going to cost them to generate sometimes it's negative in the case of wind because they get a production tax credit but they give us an offer and we can precisely dispatch them to what makes sense efficiently so we get the exact amount we need at any given point in time and the transmission system is still operated in a reliable manner and this chart shows that the upper left chart shows the dispatchable curtailments the green area are dispatchable curtailments and you can see as time is going on the amount of dispatchable curtailments we're getting rather than calling them up on the phone and dispatching them down is getting greater we expect that to be almost all green by the end of next year or by this time next year the chart on the bottom right is a chart of how often can wind set price and basically what that means is when we send it down are we sending a price signal to the market that it was done in a manner and associated with the price and what the price was and as you can see that bottom right chart doesn't start until June last year that's because that's the first month that we actually put this new product in place and as time goes on we're actually able to see that the wind resources themselves are setting the price that does lots of good things compared to other units and other resources in the area it gives a price signal to loads about what it's costing to deliver wholesale power and they're part of the footprint this also will continue on an upward trend but there are other issues that you've got to consider when you look at capacity factor what kind of capacity credit can you really count on wind to do at least in our footprint in the summertime this is a graph over the last six years that has done on our peak load day okay now you can't look at the blue the blue is the absolute megawatt value look at the green because the green line indicates the percentage of the wind online at the time so in 2006 a little over 52% of the wind was available on our peak day last year the little under 50% was available on our peak day but we've also had several years where it was less than 5% it's unpredictable when you look ahead into a summer exactly how much you're going to get out of it I mentioned most of this but the fact that we added the dispatchable intermittent resources the things that were important about that were able to now dispatch the wind in an economic manner compared to all the other resources at their offer were able to give accurate price signals to get efficient congestion management and just as important we're able to mitigate any minimum generation conditions we used to have concerns that in the middle of the night when the wind was up we would have trouble getting underneath our load now that we have a dispatchable product in place when that happens we can just dispatch them down and take care of the issue we expect the geographic diversity to continue although a lot of it is still in Iowa and Minnesota there's a significant portion also in Illinois, Indiana and Michigan so we do expect the geographic diversity to continue rapid increases in wind are really easy to manage we can just when wind wind wind goes up quickly we can dispatch the rest of the resources down if that fails we can actually dispatch the wind down now so that works very well wind wind however can cause economic issues sometimes reliability issues sometimes and so we have to be very careful about that and when forecasting is extremely important we need to be able to predict what's going to happen in the near term and if we get it right we're in good shape, we're able to schedule all the other resources around what we expect the wind to do if we don't get it right we have to respond there are different ways to respond we have to use operating reserves to date we've never had to go to the step of actually having to use operating reserves to mitigate it that would be an indication that we'd have to be careful or more careful and change our practices the day ahead when forecast error we're getting better it's hard to see on this chart but we've actually gotten about a half a percent better over the last few years and our four hour ahead forecast error we're going to get better at it as well I think those are the main points I wanted to take just to leave you with we continue to get better we gain operational experience over time geographic diversity makes a big difference and it's making everything manageable we're continuing to improve our market incentives we're continuing to improve our tools and we're learning from others not just the US but in the rest of the world because there are other significant footprints that have a lot of wind since we know that in certain parts of Europe that there is so much wind and solar and a variety of other renewables that have been intermittent resources that they have been successfully putting on their grid makes sense for all of us to be sharing that there are as John mentioned at the outset there are an abundance of renewable resources in this country we are blessed with them figuring out how to best utilize them in a cost-efficient reliable way is something that has been of concern and of obviously great interest to many players across the country and so today we also want to take a little bit of a look at that because as we know while we've been hearing about wind there are also important renewable resources in the form of biomass in terms of a whole variety of water power technologies in terms of geothermal and also solar which is again a family of resource technologies and so this afternoon we're going to hear from Fred Morris who is senior advisor with Abangoa and Abangoa is a major developer of utility central power scale concentrating solar and Fred also is the chair of the solar energy industries association USP division Fred thank you very much I decided to do something different today so I have props I'm going to talk about following the request the abundance of affordability and reliability and made in America of concentrating solar power my first prop magnifying glass getting this in they let me in with this my thermos bottle and my American flag so all of you have done this when you were kids you burn the hole in a piece of paper right you can very easily generate extremely high temperatures by concentrating the energy of the sun and making steam the next slide shows the technologies that do that and they're called concentrating solar power and the most popular ones the one in the middle the power tower the one on the upper left the trough and what these technologies do is they generate temperatures high enough to run a conventional steam turbine and they do it flawlessly and perfectly the next slide shows you the resource unlike the wind which is centered a lot in the midwest this resource is centered in the southwest and solar energy comes in two flavors comes from the sun is direct beam it hits our messy dirty atmosphere and gets diffuse and we could only concentrate beam radiation try to concentrate anything with this on an obscure day and it doesn't work but the southwest has got mountains cities military bases when you filter all of those out you're left with those few little bright spots which you say oh there's nothing left there but there's 87,000 square miles of in quotes empty land if you're an environmentalist it ain't empty but it's land that could be available for large solar thermal power plants they're 87,000 square miles which if used would generate multiples of the US so I've answered the first point is it is it abundant it is now this let's assume you have to work tonight and you cannot think straight without a cup of coffee and you cannot boil water in your office so what do you do the answer is you put more water in your pot in the morning you make a cup of coffee and you put the other one in here so what do you do with the solar power plant make the solar field bigger and store some of that energy the next slide talks about that so what you do is during the day time you generate electricity by making steam and you put some of the excess energy into huge insulated tanks you store the thermal energy if you think battery you're not listening to me it's thermal energy and so at night when the sun goes down you actually pour the thermal energy out of the thermos you make steam and the steam turbine does not know that night happened so while we talk about wind which is variable solar is also variable but with thermal storage it is less so the next slide shows you phoenix in the summer and in the winter the yellow is the sun it happens to peak in the middle of the day which all of you know it does peaks in the afternoon if you've ever been in phoenix in August they spray people who want to eat outside instead of the heaters that we have in the winter it's very hot and so what we can do is we can collect the energy in the day time and deliver it when they need it and in the winter they only need the energy in the morning everyone wakes up turns everything on and they do the same at night so the next slide which you'll have trouble seeing but I'll tell you what it is it shows that there are about eight or nine projects working in the US some as long as 25 years they work reliably we heard about how wind is sometimes there at peak time, sometimes not these plants 100% capacity factor during peak demand which if you are my colleague Joe he likes that I would like that so the next slide shows you five new plants that are being built now these exist only ONLY because of the federal loan guarantee program and the investment tax credit those two policies have allowed these 1.3 gigawatts of new projects to be built they will come online in the next two years they are to your no surprise in California, Arizona and Nevada the sunny southwest of the US the next slide shows a picture of the power tower going up at Crescent Dunes in Nevada the next slide which is really a stunning one our three towers being built by Bright Source Energy for almost 400 megawatts the next slide is an artist view in Atlanta 280 megawatt 3 square miles those of you who know New York City that's three central parks so it is big and if you look in the middle and what you are looking at is 30 years of fuel piled up around that power plant the next is a picture taken by representative Gosar who flew over it two weeks ago and you see the very large ones at the top by the way it's two per football field so that's the scale the white ones are insulated the ones that just have rings the sides haven't been built yet you can see the troughs being built now this I have to wave the flag made in America the southwest has the sun but the bits and pieces that make up Solana come from the next slide across America this is the supply chain 70 companies in 26 states are making the pumps the tubes, the boil joints the components that make this power plant and what I said that solar field we heard earlier there is a very high up front cost and a very low operation cost at least once you pay the debt off so what you are looking at is basically the fuel source for these solar power plants and they are made in America the next slide shows a picture of the assembly of the mirrors highly automated but yet almost 100 people manage to get the high quality that's needed there so next slide so America wins by developing a domestic energy resource it adds to our energy security reliable we have another resource it generates clean energy no greenhouse gas emissions like zero and no other harmful emissions more jobs per megawatt than coal and gas the five plants I showed you have already 5000 people at work building them and when they are built there will be over 300 people with lifetime jobs high quality jobs and several thousand jobs across America making the plants Solana is over 70% made in America and Mojave over 90% made in America the last question I was asked to address was affordable and that was a bit more difficult next slide I think it is affordable thanks to the two policies I mentioned the loan guarantee which is a loan like pay it back it happens if you don't pay it back not nice things these are loans that will get paid back but they do make CSP affordable today conventional sources of energy coal started in 1830 and it cost a lot of money per kilowatt hour as it got to the massive scale that we have in this country where it is over half of our energy supply the price came down and that is what we had the same thing with gas started high massive increase in scale price dropped wind and PV are doing the same thing only faster and with less public support and CSP which is the youngest of these is at the beginning of the learning curve and I believe that another decade of federal support and it too will be competitive I think that the world the country needs all the wind all the PV all the geothermal it could get I do believe that the more wind and PV that is added to the grid with its variability the greater the value of CSP with storage will be because it can help prevent dispatching down those resources so with a little more federal support on loan guarantee and the investment tax credit I think the outlook for CSP is very strong America will have another competitive clean energy source and we will have a cleaner energy future thank you there hasn't been a lot I think well understood up here with regard to the whole role of concentrating solar power and the role that it really can play and the whole the very important role of the storage that is built into this very very important and again very abundant resource so for our last wrap up speaker here who can kind of tie things up in a very neat bundle because of the very unique experience that he has had over many many years is Jim Hecker who is the council and advisor to wires which is the working group for investment in reliable and economic electric systems and of course Jim is the former chairman of FERC of the Federal Energy Regulatory Commission and we've had the pleasure to work with Jim and his wires group on looking at exploring transmission issues and the many questions that need to be discussed as part of that over the last couple years Jim Thank you Carol I appreciate the invitation from EESI and I want to express my admiration and appreciation to John Jemison and the Americans for Clean Energy Grid and the study that's been done by Synapse however I couldn't disagree more with the assertion that transmission gets too much attention I think it's only fair to say that five or six years ago nobody was paying attention to the grid that as a nation we had spent about a quarter century under investing in transmission we had not just in nominal terms but in real terms and we've been playing catch up since about 2003 the outlook is getting brighter I did have one Wisconsin commissioner tell me he was suffering from transmission fatigue primarily because American transmission companies have been so successful in building facilities in that state but we have a long way to go we have a lot of challenges and the fact that people don't pay attention to infrastructure and certainly something as as basic but which elicits a lot of interesting responses from landowners as electric transmission we have our work cut out for us the importance of this particular study and let me focus on that a little bit is that renewable energy and the prospect of greater solar and wind resources biomass and geothermal as Carol points out has refocused everybody's attention on the grid because the lavish resources as John says that we have in the area of wind and solar happen to be located where there aren't a lot of customers so we have to deliver that hundreds in some cases perhaps even thousands of miles through the electrical system which was built for a completely different purpose and design differently and it was built a good portion of it was built in the middle of the 20th century so what what is the significance of the transmission system to this discussion is principally that we can interconnect these renewable resources deliver them to market and we can do it in a way that overall benefits consumers doesn't burden them you will hear this story I've heard it plenty of times that we talk about transmission and the danger is that we're going to over build it that we're going to saddle consumers with a massive bill for facilities that they don't benefit from and I can tell you that federal regulators and state regulators are focused on that issue like a laser to improve the transmission planning process and to ensure that we have reliable energy that gets delivered over a transmission system that's big enough but not any bigger than we need to deliver these resources we all I think want a 21st century economy, a 21st century infrastructure, a 21st century grid and it's it's an issue that I think certainly weighs on my mind but it's one that that has that has its barriers to fulfillment the federal policy of electricity since not just since I was on the FERC but going back to PERPA and the natural gas policy act in the 70s has been competition it's been taking essential facilities like interstate natural gas pipelines and electric transmission systems and making them open access so that all resources can compete I think we do have a clean energy future if we can deliver it but renewable energy is going to have to prove itself and justify support for it in the market and what is that market based on it's based on an interstate grid that provides the deliverability for those resources I think as are mentioned early on the the supply induced price effect or site I just came up with my own acronym it's called the transmission induced market effect or time and if you have adequate transmission you can have a real market and it's important that we begin to view transmission as an enabler it's an enabler of technology development it's an enabler of different sources of energy and it allows consumers the benefit of lowest cost resources and the synapse study I think is really quite insightful in saying that there is going to be a a large significant price reduction of who can bring on the massive renewable resources that we have in the middle of the country and that scenario doesn't change even if we have to do a significant build out of additional transmission I think that's very a very important story to tell transmission is an economic lever you get a small investment and you get a big benefit it's a job creator my own group WIRES has done a study which you can find on our website and I think I have the preface to it out outside that shows that just manufacturing and constructing the amount of electric transmission we are likely to need over the next 20 years which is amounts to about $300 billion will provide 150 to 200,000 full time equivalent jobs annually between now and that end date that is a big contribution to this economy in an environment where 200,000 jobs is a big deal so I think my message is that a transmission can deliver real immediate cost benefits to consumers can reduce their energy costs but the story doesn't end there and I would be remiss if I didn't say that it's not just the price of renewable energy in the marketplace but it's also the markets, the competition among all resources that transmission provides it's the reduction in emissions that transmission provides it's resource diversity and an increase in reliable service reliability which becomes more and more important since we are living in an electron guzzling very reliability sensitive digital economy we have all these gadgets around our houses that love electricity even at night when you think you shut them off so we we've come to rely on transmission perhaps without really thinking about it and over the next 20 years or so we're going to have an electricity economy that's going to be more reliable it's going to be cheaper it's going to be cleaner and it's not going to happen unless we have a stronger more extensive electric transmission system that's the simple truth of it and a good combination a good way to put the various pieces together that we heard about today we have access to some really terrific experts so now is your chance to ask some questions if anybody's got any if you just identify yourself please so actually that really fits into another briefing but I mean that deserves its own it is kind of its whole-owned topic and I would submit that that is a very important piece of the picture just as this is a very important piece but if other people want to take a crack at the question please go ahead I just like I understand your question it's a really good one and I don't think the people who advocate for a for strengthening transmission system are automatically should be regarded as opponents of demand response energy efficiency micro grids these are all going to be components of a very flexible more resilient electricity system in the future and may not be exactly what we're talking about this afternoon but it does fit in I think I agree with Carol it takes into account the operating cost which is typically what's used as a to drive dispatch is fuel and variable operations and maintenance yeah and finance charges who compensates those one-generators for those costs and how are those what is the source of revenue for those costs question thank you so you're absolutely right that nobody's going to build a wind generator and get paid nothing or less than they need for their energy so the vast majority of wind that's built in the United States is built and at least a large percentage of the output if not all of it is pre-sold under long-term contracts so the wind power itself would not be subject to this price suppression effect that doesn't mean the effect doesn't happen because the wind power is bit into the market it's dispatched at zero price even though the actual cost that's paid by the load serving entity that buys the wind power is going to cover the cost of the wind resource the way we accommodated that in our model I hope I mentioned is that we assume that the price suppression effect covers about half of the energy in a consumer's electric bill so the wind power and some other power would be purchased under long-term contracts that would not be subject to that effect GBA and I just want to add hearing because our local utility PEPCO was not buying the electricity from our 500 solar rooms private individuals have put in they were going to in fact that's how I ended up getting into the party activity one of the things that was proposed they are epic here because one of the most local power companies has all these flat rooms office buildings downtown they're all roughly the same height there's no sun shadow there and so one of them has been pushing for the candidates we really ought to get a lot of solar on those rooms that would help make this somewhat safer and I just we should cover all of our rooftops with photovoltaics and use it on site it just makes sense so it should be done but you also have to keep in mind that night happens and clouds happen and people don't like their computers to stop when a cloud goes by they will get agitated so I think you need everything I think you need to generate as much as you can on site and you also need to have the ability to bring in other resources and organizations like my so know how to balance all that so everything stays online but you certainly should promote that I think I guess I would just add that I grew up in D.C. I know that it gets hot and sunny in the summer and in the electric industry I know that the prices can get quite high and one of the benefits that has to be taken into account with that kind of a resource is that it's producing maximum power at the time when the prices are the highest so you don't want to be comparing the cost of that power to sort of an average cost you want to make sure you're looking at this peak power price it's probably last summer when we were transformers in the different parts of the city blowing out and like all D.C. street was out of business for quite a number of hours and when I went to hearing on that they said it was because PEPCO said it was overload would having our own local solar help reduce that overload or is that without knowing PEPCO system but my guess is that you'd still need the same infrastructure in place to serve the load when the sun wasn't out so I don't know that you would eliminate all your overload issues they just might not occur as often probably but I'm going to ask about distributed energy storage in any way it seems like it's going to be some sort of a change so what are you particularly the transmission folks or potential expansion? I guess the first thing is that a lot of times is that people will get electric vehicles for example and charge them at night and then a lot of people hope that's the outcome but you really want to try to drive that with rate structures and metering that will enable that as well so I think you have to combine all that together if all you do is add them and they're not organized to do it at the proper time then we still have to add other vehicles to serve that load just to follow up transmission system planners pay a lot of attention to the patterns of load and they look at that sort of stuff and they say how might the patterns of load change in a world in which there's a lot more distributed storage technologies for example they look at that they examine that often times in the near term answers for the near term as well the patterns are going to start to change but it's not something that we're going to need to worry about the next three to four years it's not like they're going to dismantle the transmission system if all of a sudden we have a lot more distributed storage technologies it's not going to help they will work together is the short answer there's going to be times when the distributed technologies are going to provide a lot of the energy there's going to be times when those technologies may not be able to provide as much of the energy and there's going to be greater reliance on that period which will include solar, wind and conventional resources so it all fits together the system is planned and dispatched holistically so you just have to be careful to not try to look at one thing same goes with PV local PV makes a lot of sense and sure it's going to help on loading on some hot days but at the same time you don't plan the system for that one period you plan it for all periods distributed energy and storage actually the issue around storage and also looking at greater electrification in the transport sector and what that could mean for storage and with regard to think about the grid those are issues that we're planning to address in upcoming PV and library but I just wanted to mention that okay there we'll start in the back and we'll work our way back I'm going to use Eric with public citizens energy program this question is probably from Mr. Morris you give a lot of credit to these new large scale projects in the southwest to the federal policies such as loan guarantees and things of that nature I'm curious though because the problem with a policy such as this is how do you eventually determine that you've reached an economy of scales that prices have gone down enough that such federal aid is no longer needed you'll never get a completely honest answer from manufacturers who say hey you want to kind of ratchet down your subsidy at this point what's the best way to craft such loan guarantee and subsidy policies such that it's very clear how they will be rationed down and how it will be determined that that aid is no longer needed it's a good question if you have a feed-in tariff that becomes very important because a feed-in tariff is a price that's set at some time and then you have to keep adjusting it so that the technologies improve with the loan guarantee it's basically a loan a developer will compete to sell a product to a utility the price will be negotiated usually quite low because the utility has a lot of other options like gas and so on a price is fixed and then the federal loan guarantee simply provides the debt portion the companies provide the equity so as the technology drops in price you can either build a larger plant the dollars per megawatt will go down and I think that that happens automatically the grant is a different issue because that's essentially an upfront buy-down and that would have to be looked at and studied to see what is the appropriate amount you recall it was once 10% and then in 05 it was raised to 30% to sort of allow these larger projects to get started and come down the learning curve so the policy has to be adjusted the industry is focused on cutting costs dramatically because there is very cheap natural gas out there in a significant amount so that's known I think the policies just need to be carefully watched the short answer is we did look at the planning reserve margin associated with any particular scenario and we were a little bit conservative it was a little bit high we didn't look specifically at flexibility issues which a planning reserve margin can serve as a proxy for whether or not you have enough flexibility on the grid but we didn't get into the weeds first part is what are we doing to get closer actually getting the sighting and permitting done in a reasonable timeframe or transmission secondly second part have we figured out who pays for transmission and what is the way of thinking on that and third, what's the appetite of the private sector for funding transmission and what is the appetite of the public sector for partnering in that funding I hope everybody brought their sleeping bags has a big question on sighting we have there are lots of different things going on as you know the states are principally responsible for sighting these facilities and although FERC has what they call backstop sighting authority under 216 of the federal power act it is not authority that's ever been exercised and is in my view anyway unlikely to ever be exercised but and with respect to and you will know this being USDA projects federal projects particularly in the west that affect or cross federally owned federally protected lands that are managed by BLM Forest Service other such agencies they are responsible for for sighting those projects and for protecting other federally protected resources species wild and scenic rivers etc the department of energy in this administration has been doing something a little unusual they've created something called a rapid response team which under the leadership of one of the special advisors to the secretary has been looking at a series of specific projects and trying to expedite these are projects on federal lands and trying to facilitate I guess is the right word the consideration and environmental reviews and permitting processes by the multiple federal agencies involved and there are eight or nine in lots of these big regions that become involved in these processes sighting is a very very tough issue it's a tough and heavily populated areas in the east it's equally tough in the west where federal government owns a lot of property procedures need to be crafted that will make environmental review under NEPA more efficient that will get agencies of government both state and federal using the same kinds of criteria and being responsive to the same kinds of timelines that is really easy to say and incredibly difficult to do so sighting is going to continue to be a very very tough not to crack and I don't anticipate that the congress is at any time soon going to decide to preempt the state's authority in that area it's just not going to happen what was the last question second part was cost allocation cost allocation well maybe you ought to have dinner sending as well we we cost allocation is a very very difficult area it really the basic issue is who pays for these big facilities and you look at the way the grid operates the transmission systems like a big lake you put electrons in and people are taking it out at different locations it's very difficult to decide who the beneficiaries of any major addition or upgrade to the system is at any particular time but the the FERC after some trial and error has put out a rule called order 1000 which basically says that the beneficiaries of a transmission investment must pay the cost roughly commensurate with the benefits that they receive it's a very difficult calculus and as you might expect there is resistance of people who think that transmission cost should be very narrowly assigned to cost causers that is the generators that interconnect to the system if we did that with wind for example it would be bad news for the wind industry but since we are all taking electrons out of that big lake probably in most cases the beneficiaries are a fairly broad part of the consumer base so FERC is going to do this on a case-by-case basis based on the principle of beneficiaries pay and I think that helps enormously I should add that in the case of the Midwest ISO which is the subject of Synapse's study the costs of multi-value projects that are going to be built in that region will be shared across the region same thing is true for projects above a certain voltage in the southwest power pool same thing is true for projects in New England under the New England ISO same thing is true in Texas the Electric Reliability Council of Texas one reason Texas is so successful is because they decided early on that they had all this wind in west Texas they had all this load in east Texas and everybody was going to benefit if we could get transmission built and so everybody all load tends to pay anyway that's probably how to stop there before everybody falls asleep just in case anybody's not quite asleep yet just add another word for that you accuse me of saying people don't pay enough attention to transmission and I appreciate that I stand corrected but I should have said people pay a whole lot of attention to the cost of transmission and not enough attention to the benefits of transmission and I think this cost allocation issue is a big reason for that the MVP projects are extraordinarily craftily designed this whole this whole cadre of projects because the benefits for every state exceed the cost so that really helped them the whole Midwest region get that package to get some acceptance and it was still controversial even though each of those there are probably hundreds of transmission enhancements that are clearly cost effective that would provide multiple benefits around the country that are not going forward because of these cost allocation issues so it's extremely important even though the societal benefits are just incontrovertible we talk about beneficiary pays but it's prospective idea of who the beneficiaries are that's quite difficult you bring up an analogy to a lake I bring up an analogy to the Federal Highway System if you had a beneficiary's pay test before you ever were able to build a highway you wouldn't have a highway system because who would have anticipated who the beneficiaries are going to be it's McDonald's who knew who the beneficiaries of the highway system would be and on the electric system as well is it the producers of energy is it the consumers people are going to build all the economic benefits will be spread around all of these regions it's an extremely difficult area to to address I think that's an enormously important policy issue because the benefits are unquestionable the cost effectiveness is unquestionable in many cases but this question of cost allocation does get in the way of development do you want to comment because of the transmission issues I don't have very much to add I try to stay out of that planning stuff I I kind of deal with the hand-up not look for 10 years too much are there any last comments ok we'll take one more question hi I'm Doug Byn the Center for Energy I just have a question about has anyone looked at the non-competitive market as a competitive market this idea of the cost savings from coal retirements and wind addition the effect that we are identifying is specific to restructure which might refer to as competitive electricity markets some people may agree or disagree about that but so that's the effect that we're looking for yes absolutely other people have looked at the effects in more vertically integrated markets and then you'd have to be looking at the benefits and the cost effectiveness of the resources more on an average cost basis that's really a different kind of analysis and in many regions that there clearly are beneficial resources but it's a different issue very very much terrific job with a lot of information the presentation will be on EESI's website and there will be a video on one channel full of research but thank you all for hearing my story